Hodge has raised the percentage of pension drawdown it accepts for later life applicants. 

The bank says its drawdowns will range from 3.3% to 8%.  

Previously, its drawdowns were set at 3% of pension income for all applicants, adding that the new policy is based on the age the customer intends to begin using the income. 

The lender points out that the average retirement age of Hodge customers aged 50 and over, is 69, which under the new criteria would see the lender use 5.6% of an individual’s pension fund for affordability reasons, and up to 8% for applicants above the age of 77.   

Hodge business development director Emma Graham says: “We fully recognise that as the needs of customers change, intermediaries working with them need support in being able to move with them, particularly in the current climate. 

She adds: “This new enhanced approach we’re taking towards pension drawdown as income is another example of how we’ve used our underwriting expertise to challenge current policy.”